Debt Negotiations & Settlement | Bankruptcy Attorneys

At the Law Offices of Zhou & Chini our California Bankruptcy Lawyer may be able to help you avoid bankruptcy with debt settlement. While most bankruptcy attorneys focus mainly on filing bankruptcy chapter 7, our bankruptcy attorneys California handle all types of bankruptcy filings as well as offering aggressive creditor defense and debt settlement. If you are reading this section you should strongly consider a bankruptcy attorney in California who does both bankruptcy and debt settlement. Many of our clients do not want to file bankruptcy due to the amount of unsecured debt they may be required to pay back or several other reasons. Additionally, debt settlement may just be a better option than filing chapter 13 if they do not qualify for a chapter 7 bankruptcy. Many consumers are falling further behind in their credit card payments, the likelihood of them ever catching up decreases dramatically over time. At the same time, filing for bankruptcy to have credit card debt or other unsecured debts dismissed starts looking like an attractive option.

Credit card companies, well aware that they may end up with nothing if a bankruptcy is filed, would much rather agree to settle your debts and receive something rather than nothing. A California bankruptcy lawyer can use debt settlement strategies with unsecured creditors such as credit card companies to negotiate balances and avoid bankruptcy.

How Debt Settlement works
In exchange for a negotiated lump sum payment, typically, between 10% and 45% of the total debt owed, a credit card company or other unsecured creditors will forgive the remaining balance of the debt and report it to the credit agencies as settled. After the agreed upon debt is paid, a debtor’s credit reports will show the balance due at zero. The harassing phone calls and threat of filing bankruptcy will end once the debts are settled. Any previous history of late or non-payments will stay on the report.

It may not come as a surprise, but credit card companies aren’t big fans of debt settlement. For them it’s not so much of an issue with people that legitimately can’t pay their bills, in those situations debt settlement is the lesser of two evils. Their concern is focused on people that might opt for debt settlement on large balances of debt who have the means to make their monthly payments. For that reason, credit card companies make debt settlement an extremely difficult solution to pursue. To that end, creditors will not negotiate with card holders who are current on their payments, refusing to discuss debt settlements until payments are at least three to six months behind.

It’s during this waiting period in a debt settlement process that money is set aside to start building the lump sum payments that will be used in the negotiated settlements with the credit card companies. Depending on the total amount of debt and amount of money a debtor can pay on a monthly basis, a debt settlement process can be resolved in a time frame ranging from 18 to 48 months.

The Benefits of Attorney Driven Debt Settlements
As previously mentioned, credit card companies aren’t going to make getting a debt settlement easy. Tactics include harassing phone calls, lawsuits, foot dragging, and more. Hiring an attorney to negotiate a debt settlement can take care of many of these issues. An experienced debt settlement attorney can also help to determine whether a debt settlement will provide the best debt relief solution for a consumer’s personal situation.

Debt settlement may be a good option for consumers who don’t qualify for the full dismissal of debts in a Chapter 7 bankruptcy. Under those circumstances, a Chapter 13 filing could provide benefits as well, but the optimal solution will be dependent on a variety of financial factors. Working with an experienced attorney, consumers can examine all venues of debt relief instead of being placed into a cookie-cutter situation, as is the situation when working with a debt settlement company.